I have a VS2008 project which fails on runtime when linked with VS2010 compiled dll. Is there any way to make it work ? Or should I upgrade to VS2010 to solve this problem ?
Also, If I upgrade to VS2012, will the VS2010 dll work with it or will I have compatibility problems again ?

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It depends. There are many pitfalls when communicating across module boundaries, and there are even more pitfalls when mixing modules linked with different CRTs in the same process. What does "fails on runtime" mean? How does it fail? What does the module API look like? Is it a C API? A C++ API? Do you attempt to free memory in one module that was allocated in another? Do you attempt to use CRT objects (like FILE handles) in multiple modules that are linked with different CRTs? The safest thing to do is compile all of your projects with the same toolchain and settings, if possible.
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James McNellisFeb 28 '13 at 5:45

the other dll (VS2010) I am linking to, is an external library. Everything is c++.
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madan kandulaFeb 28 '13 at 5:47